Staff Writer - The Timeshare Beat
November 5, 1999
It has been a poorly kept secret in recent months that JELD-WEN, Inc., the majority shareholder of Trendwest Resorts,
Inc., has been quietly shopping its 80% holdings of the company around.
Though it was announced in June that JELD-WEN had retained Banc of America Securities LLC as financial advisor
to explore strategic and financial alternatives relating to JELD-WEN's ownership interest in Trendwest Resorts,
Inc., there was no official announcement that it actually intended to sell.
In a conversation with CNBC Power Lunch Anchor Bill Griffeth on Nov. 3, William Peare, the CEO of Trendwest, admitted
that not only has JELD-WEN been shopping their stake around but there are companies that have been seriously looking.
Said Peare, "Well, it has been 10 years. They want to focus on their core business. They have always said they wouldn`t be in the business in the long-term. They have also indicated they feel they hold us back a bit because they have obviously, different culture than we do. And so, I think they`re looking at their options."
Peare went on to say that he thinks the hotel companies, the cruise companies or the gaming industry all make
a lot of sense for a potential buyout. He also said that nothing is imminent in the very near term.
Recent rumors have insisted that a major cruise company will be the buyer, and that it will happen by the end of the year.
JELD-WEN, a window and door-making company, began its association with the resort and timeshare industry with a small resort in central Oregon called Eagle Crest Resort. They liked the business and teamed up with Peare to develop a new, more consumer oriented timeshare product. The end result was Trendwest, which builds the resorts and then turns them over debt-free to WorldMark, The Club.
Trendwest Resorts, Inc. has since become a leader in the timeshare industry. The company provides a flexible vacation ownership system, based on the use of vacation credits, or points, to more than 75,000 owners at more than 25 locations in the continental Western United States, Hawaii, British Columbia and Mexico-- with one on the way in Fiji.
Because of the unique method the company uses in turning its resorts over to WorldMark, members are well-protected against any disaster that might befall Trendwest. WorldMark, The Club is a nonprofit organization which was developed basically as a protection for the owners. When a new member joins, they join WorldMark The Club, which then holds all the deeds to the properties and the properties are placed in the nonprofit organization free of any debt and with no ability to put debt on them. So the owners today have approximately $110 million worth of paid-for real estate that Trendwest Resorts has no ability to encumber.
This protects WorldMark owners against the extremely unlikely possibility of Trendwest going bankrupt and taking The Club down with them, among other things.
Whoever ends up buying JELD-WEN's 80 percent of Trendwest will be buying control of Trendwest-- provided, of course, that one company buys the whole package.
Besides the rumored cruise company there have also been recent rumblings that either Park Place Entertainment or Mirage may find the company a good fit.
So far, it's all speculation.
Based in the Seattle, WA area, Trendwest recently posted third-quarter profits of 52 cents per share, with revenue for the quarter up 35 percent to $72 million, while net income was up 51 percent to $8.9 million.
The Company's addresses on the World Wide Web are http://www.trendwestresorts.com and http://www.worldmarktheclub.com